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The Landlord’s Guide to Subleasing Rental Properties

In the past, we have discussed ways to protect your rental investments from tenants who use your rental property on marketplaces such as Airbnb as a way to sublet your home.

But have you put any thought into general subleasing options and how that may affect your rental property business?

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Today we will look at what exactly subleasing a rental home is, the pros and cons for allowing subletting in your rental property, and some tips for protecting yourself and your property from the possibly consequences of subleasing.

What is Subleasing?

Subleasing is when your tenant allows another person(s), not on the original signed lease, to live in your rental property and cover the monthly rent payment.

With a sublease agreement, a tenant contracts with a new party, commonly called the sub-tenant, to reside on the property and becomes the middle man between the landlord and the sub-tenant. In this situation, the sub-tenant typically pays the tenant, who it turn pays the landlord the monthly rent. The tenant also maintains the responsibility of passing along any maintenance requests or other concerns to the landlord for the sub-tenant.

Subleasing is a viable option for many tenants who travel for work or extended vacations. They are also good for when a tenant wants to end their residence early without formally breaking the lease agreement.

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If your Anne Arundel tenants are subleasing your rental property, they are legally responsible for paying the rent they owe you each month, regardless of whether their sub-tenants pay on time or not, and must abide by all of the original lease provisions agreed to at signing.

Pros of Subleasing

As mentioned above, subleasing has some advantages for both landlords and tenants. Let’s take a look at some of the most beneficial reasons you may want your tenants to have the option to sublease your Glen Burnie rental property:

  • Lower turnover rates and a more steady flow of income will results from having either a tenant or sub-tenant in your property at all times. This can be a great source of supplemental income and create a positive cash flow for your each year.
  • If your tenant is allowed to sublease your property, there is less risk of them terminating the lease agreement early due to a job-related move or extended vacation. Having this option available is a win-win for both you and your tenant.
  • You can form a more positive relationship with your tenant by allowing them the flexibility to cover the monthly rent through subleasing. They may feel less inclined to skip out on the original agreement or not pay during times they are away.
  • You will have access to a larger pool of initial tenants, including frequent travelers, job-movers, college students, and more when subleasing your property is an option.
  • Your investment will be better protected because either teantnst or sub-tenants will be residing there most of the time. Having your residence occupied reduces criminal activity and helps prevent vandalism

Cons of Subleasing

On the other hand, you may not want to allow your Fort Meade home to be subleased to sub-tenants for a variety of reasons such as:

  • The inability to properly screen sub-tenants as you see fit. Unless explicitly stated in your original lease agreement, how sub-tenants are screened and chosen is up to your tenant since they are acting as “landlord” to their sub-tenants.
  • The loss of control you may experience with regards to how your home is maintained since your tenants take the place as “landlord” of the sub-tenants. As the middleman between you and the sub-tenants, your tenants gain some element of control over how your property is cared for, which can be risky and problematic at the end of the lease term.
  • The risk of non-payment: should the sub-tenant not pay and your tenant go missing, you are out of luck.
  • The potential for a double eviction (and double the headache) exists if the sub-tenant and tenant are found to be violating the original lease agreement. This means double the legal ramifications for getting problem tenants (and sub-tenants) out of your property.

Tips Regarding Subleasing Rental Properties

If you own rental property in the Anne Arundel County area, it is up to you whether you will allow a subleasing option for your tenants. If you decide to allow your Severna Park or Laurel tenants to sublet your rental property, here are some key things to keep in mind so you and your property are protected:

  • Include a solid subleasing clause in the original lease agreement. If you are going to allow your tenants to sublease your property, it is important the original lease agreement is legally compliant and designed to protect you and your assets. Here are some important details to include:
    • The tenant should not be allowed to sublet any part of your rental property for any or all of the term of the lease without prior written consent of the landlord and/or property management group.
    • All sub-tenants must fill out an application and follow the thorough screening procedures in place that asses credit history, criminal and eviction reports, employment, and references.
    • All parties, including the landlord, must agree to and sign the sublease agreement.
  • Never collect rent from an illegal sub-tenant. Once you collect money from a sub-tenant that is not abiding by the sublease terms, things may get complicated. They may be able to claim certain tenant’s rights and the case for the eviction could become difficult.
  • Check your local laws regarding sublease agreements. Some areas require a specific provision be added to the original lease agreement with your tenants stating that subleasing is not allowed. If you fail to include this in your lease agreement, your tenants may have the right to openly sublet your property without your consent. In some cases, you may be required to explicitly state your stance on subleasing your property to legally protect yourself as a landlord.

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In the end, whether you want to allow subleasing of your Anne Arundel County rental property is a personal decision that must be weighed carefully. With so many added risks, this option may not be for everyone.

However, if you are interested in taking advantage of the benefits of subleasing your property, make sure you enlist the help of a qualified property management group to help you with your lease agreements. Legal problems resulting from a poorly drafted lease agreement that lead to an eviction, damaged property at the hands of sub-tenants, or a missing tenant and no monthly rent payments are just some of the consequences you many face as  landlord who allows subleasing.

To prevent these types of problems, contact Bay Management Group to help you with all of your lease agreement needs. They can draft original lease agreements that are legally compliant, have strong screening procedures in place that can be applied to sub-tenants, and can even help with inspections so that you know your property is being cared for whether your tenants or sub-tenants are living there.  Get in touch today and see how they can help you with all of your property management needs.